OK, now they say there IS a deal

OK, so maybe the House isn’t going to vote on it tonight, but apparently there is a deal:

President Obama and Senate Republicans reached a sweeping deal late Monday that would let income taxes rise significantly for the first time in more than 20 years, fulfilling Obama’s promise to raise taxes on the rich and averting the worst effects of the “fiscal cliff.”

According to Democratic aides, Vice President Biden is on his way to the Capitol to explain the details of the pact he negotiated with Minority Leader Mitch McConnell, and a Senate vote on the package could be held by 10:30 p.m. ET, beating a midnight deadline. White House officials gave in on the last issue, how to handle estate taxes, yielding to GOP wishes, aides said.

The House will begin considering the bill tomorrow, with a vote on final passage in the next day or two…

I’m not sure what I think of it, beyond being disgusted that we had to have all this drama over something that should have been normal, everyday functioning of government.

You?

20 thoughts on “OK, now they say there IS a deal

  1. Bryan Caskey

    I’m not counting my chickens yet. Let’s see if the deal passes the House. I wonder if they included language to keep us from going over the milk cliff as well.

    Reply
  2. tavis micklash

    Anyone have a better link to whats in the plan?

    Did they do anything for means testing Social Security? Anything to cut spending?

    From what I’m reading there is almost nothing in there for fiscal conservatives.

    I’m glad they got together to do something but I’m disappointed that the house couldn’t /wouldn’t come up with a plan.

    That’s is where the Republicans had a majority and they could have gotten a better deal I believe. Punting it to the senate was a complete lack of leadership.

    Its behind us now. It will be replayed again in a few months at the debt ceiling hikes.

    My open letter to Fiscal Conservatives. Show us where you want cuts. Lets have a heart to heart on entitlement programs. Present America with a problem and a solution. We will back you. You don’t have to fix EVERY program but lets start with 1. Lets concentrate our efforts.

    Reply
  3. Steve Gordy

    It’s the reverse of the Bush43 philosophy of “Tax cuts and spending increases.” That didn’t work so well. Perhaps doing something new will have better results.

    Reply
    1. Silence

      I don’t think that there’s much in the way of spending cuts in this deal, maybe a smidgeon of curtailing future spending growth, but not much. Mostly just a tax hike on wage-earners and the highly compensated.

      Reply
    2. Brad Warthen Post author

      The worrisome thing, of course, is that both spending increases and tax cuts can stimulate the economy. Tax increases and spending cuts can both have the opposite effect.

      Two years ago, the UK increased taxes (when I was there, in fact) and cut spending. And since then, the British economy has been even more sluggish than ours.

      I think tax increases and spending cuts are the way to go, but I hope there isn’t an unintended ill effect.

      Reply
  4. bud

    I think tax increases and spending cuts are the way to go, but I hope there isn’t an unintended ill effect.
    -Brad

    The unintended ill effect is one that is easily understood by economists. Of course big spending cuts will do harm to an economic recovery. Tax hikes will as well but the impact is minimal if limited to the rich who don’t spend much anyway. I think it was a mistake to return the FICA rate to 6.2% at this time. That will be necessary at some point but not now.

    Reply
      1. Kathryn Fenner

        Agreed on the FICA raise.

        As far as retirement age goes, white collar workers can usually work far longer than those whose jobs are more physical. People with more physical jobs are paid less well, on average and find it harder to save independently for retirement and are thus more dependent on SS.

        Reply
        1. Steven Davis II

          Tell that to Columbia’s Chief of Police and Fire Chief. Poor underpaid firemen and police officers being forced to retire in their 40′s and still have to go back to work to make ends meet.

          Reply
    1. Steven Davis II

      ” Tax hikes will as well but the impact is minimal if limited to the rich who don’t spend much anyway”

      I didn’t realize so many rich people were misers. Maybe those rich people should start spending money like poor people to get this economy back in line.

      Reply
    2. Steven Davis II

      bud, is it a “mistake” just because it directly impacts you? Tax increases seem to be okay to you as long as they’re above your income level.

      Reply
  5. Bart

    Anyone out there who can honestly say with a straight face this is a tax increase? This deal is not a tax increase, it is the continuation of a temporary tax cut for incomes under Bush that has somehow morphed into a faux tax hike if allowed to expire as intended in the first place. The only ones who are not included are incomes for a couple over $450K and $400K for an individual. Investment income tax rates go up by 5% and the tax holiday on Social Security has lapsed and the rate returns to what it was 2 years ago.

    We have been gamed, blamed, played for damn fools, and used as tools to further political agendas that have not one thing to do with us as taxpaying, voting, and working Americans who actually do pay our taxes. The working Americans who contribute to the federal tax fund at a 53% participation rate while at least 47% do not participate and end up paying nothing into the federal treasury. If anything, after paying nothing in, they actually get money back in one form or another. Please note – I made it clear, this is at the federal level, not the state, local, sales tax, or other taxes imposed on us at every turn that everyone must pay.

    There is one clear winner in all of the back and forth and name calling – Barack Obama. He is the consumate politician and if one were able to listen in on private conversations, you could probably rest assured he was always more than willing to give a little on his insistence to hold the line at $250K in order to win the larger prize. Now, he has secured the blessings of the “middle-class”, will bring in more tax revenue, increase spending and miminize cuts in benefits by a ration of 41-1 in revenues vs. cuts. He put the Republicans in a no-win situation by doing absolutely nothing but making a few campaign style appearances and threatening to portray them in a negative light during his inauguration ceremony.

    Reply

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